Final answer:
The phenomenon of hearing distinct words where no clear boundaries exist is an example of Ambiguity in Language. It illustrates how our cognition processes language based on our knowledge and understanding.
Step-by-step explanation:
The phenomenon where your brain automatically segments streams of speech into distinct words, even when word boundaries are not obviously present, is an example of B. Ambiguity in Language. This automatic parsing of words is due to our knowledge and familiarity with the language, which fills in the perceived gaps that aren't really there in the acoustic signal. This concept highlights the near-effortless way in which our cognitive systems process and understand language, a testament to the seamless interaction between our vast language experience and innate language abilities. The phenomenon described in the question is an example of Ambiguity in Language. In word segmentation, our brain automatically separates the pieces that make up words and interprets word boundaries, even if they don't exist. This is because we have learned how to understand the words we are hearing. However, many words have no clear boundaries, leading to ambiguity in language.